Car insurance - unemployed vs employed pricing

peasantboy

So, I recently renewed my car insurance and I noticed that there was a big difference between what someone would pay if they are either employed or unemployed. For me, it was over a £100 difference. Why is that? If your unemployed and still able to pay a years worth insurance up-front why is there such a huge difference?
I lied and said I was employed and I saved £120, if I didn't lie and wasn't able to pay up-front it would have cost me over £600. It sucks.

Oscar_The_Grouch

Hi there

2 comments to make here:

1. Your insurance is invalid
By deliberately misleading your insurers, you invalidate your policy and they can declare it "void". This means that if you are unfortunate enough to have an accident and it's your fault, you run the risk of being done for driving without insurance as well as spending the rest of your life paying off whatever sum your voided insurers paid out to settle the claim.

2. Reason for difference
The premium you pay is based on the statistical data collected by insurers. They take into account everything from your post code, age, sex and occupation to the mileage you expect to do in a year and teh age of your car. The statistics show that the cost of insuring someone who is unemployed is greater than the cost of someone who has a job - not only are you more likely to claim, but the cost of the claim will be higher.

Let's look at it from another angle; would you expect someone driving a mini to pay as much for their insurance as someone driving an Aston Martin? Of course not.

Jakg

Over what Oscar said - they often find that, for example, a sales rep may well be involved in more accidents than a funeral director (made up statistics to illustrate a point), and so the sales rep may have to pay more. Unemployed could well mean anything so they simply put you in the highest risk job category.

Insurance is all about managing risk to gain a profit.

raskazz

peasantboy wrote: »

I lied and said I was employed and I saved £120

That is incredibly foolish.

Oscar_The_Grouch

Ermmm... One other thing....

Telling a lie to your insurer is also known as "fraud" which is a criminal offence.

Just thought you should know....

bjcl

just as a possible reason as to why: employed people tend to be at jobs for around 8 hours a day... unemployed people will not be and therefore would be more likely to be driving (and thus at a higher chance or being in an accident) during those hours...
can argue whether this is fair or not but at the end of the day your insurance is not valid.

raskazz

Oscar_The_Grouch wrote: »

Ermmm... One other thing....

Telling a lie to your insurer is also known as "fraud" which is a criminal offence.

Just thought you should know....

Not to mention being a specific offence under s.174(5) of the Road Traffic Act:

"(5) A person who makes a false statement or withholds any material information for the purpose of obtaining the issue—

(a) of a certificate of insurance or certificate of security under Part VI of this Act

is guilty of an offence."